1929 Crisis and the Rise of Totalitarianism
The 1929 Crisis and the Crash
The economic prosperity of the New York Stock Exchange came to an end in 1929. This was the year in which the United States experienced a severe economic crisis caused by excess production in relation to consumption.
During the First World War, the U.S. agricultural industry, along with other major industries, had dramatically increased its production in order to supply their allies in the war. However, by the end of the war, demand in these countries decreased, creating an accumulation of stock in agricultural products and industrial goods that had not been sold. This caused prices to fall, and companies suffered major losses. In 1929, this situation created an atmosphere of distrust, and the rise of share prices slowed.
On 24 October 1929, a date known as Black Thursday, fear of an even further drop in prices caused many investors to sell stocks at an extremely fast pace, some stocks actually having no buyers.
The Great Depression
From 1930 to 1931, the crisis spread from the U.S. to the rest of the world, affecting Europe and countries in Asia and Latin America. It thus became a global crisis, known as the Great Depression, and one of the biggest economic crises in history.
Consequences of the Crisis
The crisis affected all aspects of life:
- Economically: The capitalist system was strongly rejected by the middle class and workers.
- Population growth: Affected by economic hardship.
- Unemployment and inequality: Increased in society.
- Politically: Democracy was discredited by the depression, since it had proven unable to prevent it, and new ideologies appeared as answers to the problem, such as totalitarianism among the middle class and communism among the working class.
The Crisis of Democracy and the Rise of Totalitarianism
During the interwar period, the catastrophe of the First World War and the post-war difficulties helped breed a new current of thought against the democratic system, considering that parliamentarianism had failed.
- Democracy was maintained in the United States (presidential system) and in European countries (parliamentary system) with more liberal traditions, such as the United Kingdom and France.
- Other states in central and southern Europe adopted authoritarian regimes with one ruler, or totalitarian regimes with one party that had total control over society. Totalitarian regimes had the social support of the middle class, who were unhappy about the decrease in their standard of living caused by the crisis; big businesses that were eager to halt the rise of communism; many former soldiers and frustrated jobless citizens; and the most conservative sectors of society. Two examples of totalitarianism were Fascism in Italy and Nazism in Germany.
Characteristics of Totalitarianism
Totalitarian parties held full political power and control over every area of people’s lives. Therefore, in countries where they rose to power, they implemented:
- An authoritarian political system. In this system, power was concentrated in the hands of the state, led by a charismatic leader who demanded blind obedience: Duce Mussolini in Italy, or the Führer Hitler in Germany. There was neither personal freedom nor political pluralism. There was only one party, which subdued any opposition violently.
- Economic and social control. The state directed the economy and declared itself anti-capitalist and anti-communist.
- Rejection of equality. They considered members of the single party to be superior to others, men superior to women, and certain races superior to others.
- Irrational thinking. They defended fanaticism and blind obedience, and used symbols, emblems, songs, and uniforms to unify their followers.
- Ultra-nationalism. They exalted the greatness of the nation and demanded new territories in the name of reuniting the nation or of creating a Lebensraum.
- Militarism. They defended a strong military and war as instruments of power, prestige, and progress for their people.